TurboTax Introduces Product That Offers 5-Day Early Access to Tax Refunds

With the 2024 holiday shopping season wrapped up, it’s now time to start thinking about 2024 taxes. While an unpleasant thought, taxes might be a little less painful this year with TurboTax’s new service.

Using the aptly named “5 Days Early Refund Offering,” TurboTax customers can get their tax refunds deposited into their bank accounts five days before IRS settlement. Of course, there is a fee for the service — $25. A refund deposited into a Credit Karma account, which is also owned by Intuit, is free.

According to TurboTax, the average tax refund is around $3,000. The 5 Days Early Refund Offering gives taxpayers quicker access to their funds as long as the refund is $250 or more.

Even though the FTC banned TurboTax from advertising free services, the financial services software company will still have its Refund Advance loan option, which does not charge any fees or interest when deposited into a Credit Karma account. However, customers will need to be approved and are limited to a $4,000 maximum loan.

Why Did TurboTax Introduce the 5 Days Early Refund Offering?

TurboTax asked 4,000 Americans if getting their tax refunds faster mattered. Unsurprisingly, many of them said faster access to money would help them relieve some financial stress.

Among the respondents, 33% will use the money for essentials like food and medications. About 43% planned to put the refund in savings. Only 13% will go on vacation with the money, and 8% will spend it on entertainment. Interestingly, among Gen Z survey participants, around 19% will invest their tax refund in stocks, bonds, and even cryptocurrency.

“We are proud to continue advancing our faster refund offerings as well as provide free do-it-yourself filing through our mobile app offer to arm our customers with the financial flexibility and security they deserve,” said Intuit executive Mark Notarainni.

While TurboTax does charge a fee for the 5 Days Early Refund Offering, it seems most tax filers are open to paying a bit more to get their refund faster. Per a survey done by PYMNTS, 39% would rather spend a little to get their money instantly than wait for the typical time it takes for disbursement of the funds.